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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
________________________________________________ 
FORM 10-Q
 ________________________________________________  
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number 001-11713
________________________________________________  
OceanFirst Financial Corp.
(Exact name of registrant as specified in its charter)
 ________________________________________________ 
Delaware22-3412577
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
110 West Front Street, Red Bank,NJ07701
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (732) 240-4500
________________________________________________  
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common stock, $0.01 par value per shareOCFCNASDAQ
Depositary Shares (each representing a 1/40th interest in a share of 7.0% Series A Non-Cumulative, perpetual preferred stock)OCFCPNASDAQ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes       No   .
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  .
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer Accelerated Filer 
Non-accelerated Filer Smaller Reporting Company 
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    YES      NO  .
As of April 29, 2024, there were 58,713,469 shares of the Registrant’s Common Stock, par value $0.01 per share, outstanding.


OceanFirst Financial Corp.
INDEX TO FORM 10-Q
 
  PAGE
PART I.FINANCIAL INFORMATION
Item 1.Consolidated Financial Statements (unaudited)
Item 2.
Item 3.
Item 4.
PART II.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
FINANCIAL SUMMARY(1)
At or for the Quarters Ended
(dollars in thousands, except per share amounts)March 31, 2024December 31, 2023March 31, 2023
SELECTED FINANCIAL CONDITION DATA:
Total assets$13,418,978 $13,538,253 $13,555,175 
Loans receivable, net of allowance for loan credit losses10,068,209 10,136,721 9,986,949 
Deposits10,236,851 10,434,949 9,993,095 
Total stockholders’ equity1,665,837 1,661,945 1,610,371 
SELECTED OPERATING DATA:
Net interest income86,224 87,824 98,802 
Provision for credit losses591 3,153 3,013 
Other income12,286 11,861 2,073 
Operating expenses58,672 60,189 61,309 
Net income 28,610 27,752 27,899 
Net income attributable to OceanFirst Financial Corp.28,667 27,682 27,883 
Net income available to common stockholders27,663 26,678 26,879 
Diluted earnings per share0.47 0.46 0.46 
SELECTED FINANCIAL RATIOS:
Book value per common share at end of period28.32 27.96 27.07 
Cash dividend per share0.20 0.20 0.20 
Dividend payout ratio per common share42.55 %43.48 %43.48 %
Stockholders’ equity to total assets12.41 12.28 11.88 
Return on average assets (2) (3) (4)
0.82 0.78 0.82 
Return on average stockholders’ equity (2) (3) (4)
6.65 6.41 6.77 
Net interest rate spread (5)
2.23 2.25 2.94 
Net interest margin (2) (6)
2.81 2.82 3.34 
Operating expenses to average assets (2) (4)
1.74 1.76 1.88 
Efficiency ratio (4) (7)
59.56 60.38 60.78 
Loan-to-deposit ratio (8)
98.90 97.70 100.50 
ASSET QUALITY (9):
Non-performing loans (10)
$35,011 $29,548 $22,437 
Allowance for loan credit losses as a percent of total loans receivable (8) (11)
0.66 %0.66 %0.60 %
Allowance for loan credit losses as a percent of total non-performing loans (10) (11)
191.86 227.21 268.28 
Non-performing loans as a percent of total loans receivable (8) (10)
0.35 0.29 0.22 
Non-performing assets as a percent of total assets (10)
0.26 0.22 0.17 
(1) With the exception of end of quarter ratios, all ratios are based on average daily balances.
(2) Ratios are annualized.
(3) Ratios for each period are based on net income available to common stockholders.
(4) Performance ratios for the quarter ended March 31, 2024 included a net benefit related to a net gain on equity investments, a net gain on sale of trust business and the Federal Deposit Insurance Corporation (“FDIC”) special assessment of $2.7 million, or $2.0 million, net of tax expense. Performance ratios for the quarter ended December 31, 2023 included a net benefit related to a net gain on equity investments and the FDIC special assessment of $513,000, or $384,000, net of tax expense. Performance ratios for the quarter ended March 31, 2023 included a net expense related to merger related expenses, net branch consolidation expense, net loss on equity investments, and net loss on sale of investments of $7.6 million, or $5.8 million, net of tax benefit.
(5) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(6) Net interest margin represents net interest income as a percentage of average interest-earning assets.
(7) Efficiency ratio represents the ratio of operating expenses to the aggregate of other income and net interest income.
(8) Total loans receivable excludes loans held-for-sale.
(9) At March 31, 2024 and December 31, 2023, non-performing loans included the remaining exposure of $8.8 million on a single commercial real estate relationship that was partially charged-off during the year ended December 31, 2023.
(10) Non-performing loans and assets generally consist of all loans 90 days or more past due and other loans in the process of foreclosure. It is the Company’s policy to cease accruing interest on all such loans and to reverse previously accrued interest.
(11) Loans acquired from prior bank acquisitions were recorded at fair value. The net unamortized credit and purchased with credit deterioration (“PCD”) marks on these loans, not reflected in the allowance for loan credit losses, was $7.0 million, $7.5 million, and $10.5 million at March 31, 2024, December 31, 2023 and March 31, 2023, respectively.

4

Summary
OceanFirst Financial Corp. is the holding company for OceanFirst Bank N.A. (the “Bank”), a regional bank serving business and retail customers throughout New Jersey and the major metropolitan areas of Philadelphia, New York, Baltimore, and Boston. The term “Company” refers to OceanFirst Financial Corp., the Bank and all their subsidiaries on a consolidated basis. The Company’s results of operations are primarily dependent on net interest income, which is the difference between the interest income earned on interest-earning assets, such as loans and investments, and the interest expense on its interest-bearing liabilities, such as deposits and borrowings. The Company also generates non-interest income such as income from bankcard services, trust and asset management products and services, deposit account services, and commercial loan swap income. The Company’s operating expenses primarily consist of compensation and employee benefits, occupancy and equipment, marketing, federal deposit insurance and regulatory assessments, data processing, check card processing, professional fees and other general and administrative expenses. The Company’s results of operations are significantly affected by competition, general economic conditions, including levels of unemployment and real estate values, as well as changes in market interest rates, inflation, government policies and actions of regulatory agencies.
Key developments relating to the Company’s financial results and corporate activities for the quarter ended March 31, 2024 were as follows:

Net Interest Margin: Net interest margin of 2.81%, reflecting a level of stabilization.
Capital Accretion: The Company continued to build capital, while also resuming share repurchases. The Company’s common equity tier 1 capital ratio and book value per share were 11.01% and $28.32, respectively, and increased 15 basis points and $0.36 from the prior linked quarter. The Company repurchased 957,827 shares totaling $15.1 million.
Expense Management: The Company continued to exercise disciplined expense control. Non-interest expense was $58.7 million, which included a FDIC special assessment charge of $418,000.
Asset Quality: Asset quality metrics remain strong as criticized and classified assets, non-performing loans, and loans 30 to 89 days past due as a percentage of total loans receivable were 1.65%, 0.35%, and 0.17%, respectively. These metrics continue to reflect strong credit performance and remain low compared to pre-pandemic levels.
The current quarter results were impacted by the following matters. Net interest income and margin were modestly impacted by a continued mix-shift to and repricing of higher-cost funding that offset the increase in yields on interest-earning assets. Deposit beta, which is the change in rates paid to customers relative to the change in federal funds target rate, increased modestly to 40%, from 38% in the prior linked quarter. Additionally, the results included several non-recurring matters, which included a $1.2 million gain on sale of a portion of the Company’s trust business, a $1.2 million write-off in income tax expense, $418,000 in FDIC special assessments, and $345,000 in bank owned life insurance death benefits.
Net income available to common stockholders for the quarter ended March 31, 2024 increased to $27.7 million, or $0.47 per diluted share, as compared to $26.9 million, or $0.46 per diluted share, for the corresponding prior year period. The dividends paid to preferred stockholders were $1.0 million for each of the three months ended March 31, 2024 and 2023, respectively.
On April 18, 2024, the Company’s Board of Directors declared a quarterly cash dividend on common stock of $0.20 per share. The dividend, related to the quarter ended March 31, 2024, will be paid on May 17, 2024 to common stockholders of record on May 6, 2024. The Board also declared a quarterly cash dividend on preferred stock of $0.4375 per depositary share, representing a 1/40th interest in the Series A Preferred Stock. This dividend will be paid on May 15, 2024 to preferred stockholders of record on April 30, 2024.
5

Analysis of Net Interest Income
Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities. Net interest income depends upon the relative amounts of interest-earning assets and interest-bearing liabilities and the interest rate earned or paid on them. For the three months ended March 31, 2024, interest income included net loan fees of $737,000, as compared to $598,000 for the same prior year period.
The following table sets forth certain information relating to the Company for the three months ended March 31, 2024 and 2023. The yields and costs, which are annualized, are derived by dividing the income or expense by the average balance of the related assets or liabilities, respectively, for the periods shown except where noted otherwise. Average balances are derived from average daily balances. The yields and costs include certain fees and costs which are considered adjustments to yields.
 For the Three Months Ended March 31,
 20242023
(dollars in thousands)Average BalanceInterest
Average
Yield/
Cost (1)
Average BalanceInterest
Average
Yield/
Cost (1)
Assets:
Interest-earning assets:
Interest-earning deposits and short-term investments$163,192 $2,226 5.49 %$129,740 $938 2.93 %
Securities (2)
2,098,421 22,255 4.27 1,955,399 16,376 3.40 
Loans receivable, net (3)
Commercial6,925,048 104,421 6.06 6,840,006 92,780 5.50 
Residential real estate2,974,468 28,596 3.85 2,872,049 25,161 3.50 
Home equity loans and lines and other consumer (“other consumer”)248,396 4,104 6.65 263,404 3,779 5.82 
Allowance for loan credit losses, net of deferred loan costs and fees(59,141)— — (50,554)— — 
Loans receivable, net10,088,771 137,121 5.46 9,924,905 121,720 4.96 
Total interest-earning assets12,350,384 161,602 5.26 12,010,044 139,034 4.68 
Non-interest-earning assets1,206,336 1,234,549 
Total assets$13,556,720 $13,244,593 
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing checking$3,925,965 20,795 2.13 %$3,863,338 6,269 0.66 %
Money market1,092,003 9,172 3.38 705,631 1,759 1.01 
Savings1,355,718 4,462 1.32 1,369,118 334 0.10 
Time deposits2,414,063 25,426 4.24 1,826,662 12,968 2.88 
Total8,787,749 59,855 2.74 7,764,749 21,330 1.11 
Federal Home Loan Bank (“FHLB”) advances644,818 7,771 4.85 1,222,791 14,614 4.85 
Securities sold under agreements to repurchase68,500 411 2.41 71,898 90 0.51 
Other borrowings (4)
500,901 7,341 5.89 306,156 4,198 5.56 
Total borrowings1,214,219 15,523 5.14 1,600,845 18,902 4.79 
Total interest-bearing liabilities10,001,968 75,378 3.03 9,365,594 40,232 1.74 
Non-interest-bearing deposits1,634,583 2,028,507 
Non-interest-bearing liabilities (4)
247,129 240,815 
Total liabilities11,883,680 11,634,916 
Stockholders’ equity1,673,040 1,609,677 
Total liabilities and equity$13,556,720 $13,244,593 
Net interest income$86,224 $98,802 
Net interest rate spread (5)
2.23 %2.94 %
Net interest margin (6)
2.81 %3.34 %
Total cost of deposits (including non-interest-bearing deposits)2.31 %0.88 %
(1)Average yields and costs are annualized.
(2)Amounts represent debt and equity securities, including FHLB and Federal Reserve Bank (“FRB”) stock, and are recorded at average amortized cost, net of allowance for securities credit losses.
(3)Amount is net of deferred loan costs and fees, undisbursed loan funds, discounts and premiums and allowance for loan credit losses, and includes loans held for sale and non-performing loans.
(4)For 2023, includes reclassifications to conform with current period presentation.
(5)Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(6)Net interest margin represents net interest income divided by average interest-earning assets.
6

Comparison of Financial Condition at March 31, 2024 and December 31, 2023
Total assets decreased by $119.3 million to $13.42 billion, from $13.54 billion, primarily due to decreases in loans and debt securities. Total loans decreased by $68.9 million to $10.13 billion, from $10.19 billion, due to loan payoffs and lower loan originations. For more information on the composition of the loan portfolio, see “Lending Activities.” Held-to-maturity debt securities decreased by $31.1 million to $1.13 billion, from $1.16 billion, primarily due to principal repayments. Other assets increased by $20.3 million to $200.0 million, from $179.7 million, primarily due to an increase in market values associated with customer interest rate swap programs.
Total liabilities decreased by $123.2 million to $11.75 billion, from $11.88 billion primarily related to lower deposits and a funding mix shift. Deposits decreased by $198.1 million to $10.24 billion, from $10.43 billion. Time deposits decreased to $2.32 billion, from $2.45 billion, or 22.7% and 23.4% of total deposits, respectively, which was primarily related to planned runoff of brokered time deposits, which decreased by $88.1 million. The loan-to-deposit ratio was 98.9%, as compared to 97.7%. FHLB advances decreased by $190.2 million to $658.4 million, from $848.6 million due to mix shift in funding sources to other borrowings, which increased by $229.3 million to $425.7 million, from $196.5 million, as a result of lower cost funding availability.
Other liabilities increased by $36.4 million to $337.1 million, from $300.7 million, primarily due to an increase in the market values associated with customer interest rate swaps and related collateral received from counterparties.
Capital levels remain strong and in excess of “well-capitalized” regulatory levels at March 31, 2024, including the Company’s common equity tier one capital ratio which increased to 11.01%, up 15 basis points from December 31, 2023.
Total stockholders’ equity increased to $1.67 billion, as compared to $1.66 billion, primarily reflecting net income, partially offset by capital returns comprising of share repurchases and dividends. For the quarter ended March 31, 2024, the Company repurchased 957,827 shares totaling $15.1 million representing a weighted average cost per share of $15.64. The Company had 1,976,611 shares available for repurchase under the authorized repurchase program. Additionally, accumulated other comprehensive loss decreased by $1.4 million primarily due to increases in fair market value of available-for-sale debt securities, net of tax. The Company’s stockholders’ equity to assets ratio was 12.41%, as compared to 12.28% and book value per share increased to $28.32, as compared to $27.96.

Comparison of Operating Results for the Three Months Ended March 31, 2024 and March 31, 2023
General
Net income available to common stockholders increased to $27.7 million, or $0.47 per diluted share, as compared to $26.9 million, or $0.46 per diluted share. Net income for the quarter ended March 31, 2024 included net gains on equity investments of $1.9 million, a net gain on sale of a portion of its trust business of $1.2 million, and the special FDIC assessment of $418,000. These items increased net income by $2.0 million, net of tax, for the quarter ended March 31, 2024. Net income for the quarter ended March 31, 2023 included merger related expenses of $22,000, net branch consolidation expense of $70,000, net loss on equity investments of $2.2 million and net loss on sale of investments of $5.3 million. These items decreased net income by $5.8 million, net of tax, for the quarter ended March 31, 2023.
Interest Income
Interest income increased to $161.6 million, from $139.0 million and the yield on average interest-earning assets increased to 5.26%, from 4.68%. The average balance of interest-earning assets increased by $340.3 million, primarily driven by growth of $163.9 million in total loans and $143.0 million in securities.
Interest Expense
Interest expense increased to $75.4 million, from $40.2 million, primarily due to a $1.02 billion increase in the average balance of deposits and a $194.7 million increase in the average balance of other borrowings, partly offset by a $578.0 million decrease in the average balance of FHLB advances, which reflect a shift in funding sources. The cost of average interest-bearing liabilities increased to 3.03%, from 1.74%, primarily due to higher cost of deposits. The total cost of deposits (including non-interest-bearing deposits) increased to 2.31%, from 0.88%.
7

Net Interest Income and Margin
Net interest income decreased to $86.2 million, from $98.8 million, primarily reflecting the net impact of the higher interest rate environment. The net interest margin decreased to 2.81%, from 3.34%, primarily due to the increase in cost of funds outpacing the increase in yield on average interest-earning assets.
Provision for Credit Losses
Provision for credit losses was $591,000, as compared to $3.0 million. The current quarter provision was driven by the net effect of continued uncertainty impacting the banking industry and improvements in macro-economic forecasts. Net loan charge-offs were $349,000 primarily related to a single consumer borrower, as compared to net loan recoveries of $47,000.
Non-interest Income
Other income increased to $12.3 million, as compared to $2.1 million. Other income was favorably impacted by net gains on equity investments of $1.9 million and a net gain on sale of a portion of its trust business of $1.2 million. The prior year period’s other income was adversely impacted by a net loss equity investments of $2.2 million and net loss on sale of investment of $5.3 million. The remaining decrease of $370,000 was driven by a decrease in fees and service charges of $686,000 on lower retail deposit fees and title activity.
Non-interest Expense
Operating expenses decreased to $58.7 million, as compared to $61.3 million. Operating expenses were adversely impacted by an FDIC special assessment of $418,000 in the current year, and $92,000 from merger-related and net branch consolidation expenses in the prior year. The remaining decrease of $3.0 million was driven by decreases in professional fees of $2.4 million and compensation and employee benefits expenses of $1.2 million, which reflect the net realization of the Company’s performance improvements initiatives and strategic investments made over the past year.
Income Tax Expense
The provision for income taxes was $10.6 million, as compared to $8.7 million. The effective tax rate was 27.1%, as compared to 23.7%. The current quarter's effective tax rate was negatively impacted by 3.0% due to a write-off of a deferred tax asset of $1.2 million.
8

Liquidity and Capital Resources
Liquidity Management
The Company manages its liquidity and funding needs through its Treasury function and the Asset Liability Committee. The Company has an internal policy that addresses liquidity and management monitors the adherence to policy limits to satisfy current and future cash flow needs. The policy includes internal limits, monitoring of key indicators, deposit concentrations, liquidity sources and availability, stress testing, collateral management, and other qualitative and quantitative metrics.
Management monitors cash on a daily basis to determine the liquidity needs of the Bank and OceanFirst Financial Corp. (the “Parent Company”), a separate legal entity from the Bank. Additionally, management performs multiple liquidity stress test scenarios on a periodic basis. As of March 31, 2024, the Bank and the Parent Company continued to maintain adequate liquidity under all stress scenarios. The Company also has a detailed contingency funding plan and obtains comprehensive reporting of funding trends on a monthly and quarterly basis, which are reviewed by management.
The Company continually evaluates its on-balance sheet liquidity, including cash and unpledged securities and funding capacity at the FHLB and FRB Discount Window, and periodically tests each of its lines of credit. As of March 31, 2024, total on-balance sheet liquidity and funding capacity was $3.7 billion.
The Company has a highly operational and granular deposit base, with long-standing client relationships across multiple customer segments providing stable funding. The vast majority of the government deposits are protected by the Federal Deposit Insurance Corporation insurance as well as the State of New Jersey under the Government Unit Deposit Protection Act, which requires uninsured government deposits to be further collateralized by the Bank. At March 31, 2024, the Bank reported in its Call Report $5.36 billion of estimated uninsured deposits. This total included $2.45 billion of collateralized government deposits and $1.40 billion of intercompany deposits of fully consolidated subsidiaries, leaving estimated adjusted uninsured deposits of $1.52 billion, or 14.7% of total deposits. On-balance-sheet liquidity and funding capacity represented 243.8% of the estimated adjusted uninsured deposits.
The primary sources of liquidity specifically available to the Parent Company are dividends from the Bank, proceeds from sale of investments, and the issuance of debt, preferred and common stock. For the three months ended March 31, 2024, the Parent Company received dividend payments of $41.0 million from the Bank. At March 31, 2024, the Parent Company held $90.5 million in cash and cash equivalents.
The Bank’s primary sources of funds are deposits, principal and interest payments on loans and investments, FHLB advances, and other borrowings. While scheduled payments on loans and securities are predictable sources of funds, deposit flows, loan prepayments, and loan and investment sales are greatly influenced by interest rates, economic conditions, and competition. The Bank has other sources of liquidity if a need for additional funds arises, including lines of credit at multiple financial institutions, and access to the FRB discount window.
As of March 31, 2024, the Company pledged $7.34 billion of loans with the FHLB and FRB to enhance the Company’s borrowing capacity, which included collateral pledged to the FHLB to obtain a municipal letter of credit to collateralize certain municipal deposits. The Company also pledged $1.35 billion of securities to secure borrowings, enhance borrowing capacity, collateralize its repurchase agreements, and for other purposes required by law. The Company had $658.4 million of FHLB advances, including $49.8 million of overnight borrowings as of March 31, 2024, as compared to $848.6 million of FHLB term advances at December 31, 2023, and no outstanding overnight borrowings from the FHLB. The Company had $425.7 million of other borrowings as of March 31, 2024, as compared to $196.5 million at December 31, 2023, reflecting a shift in funding sources from FHLB advances to other borrowings. The Company had no outstanding borrowings from the FRB discount window at both March 31, 2024 or December 31, 2023.
The Company’s cash needs for the quarter ended March 31, 2024 were primarily satisfied by the increase in other borrowings. The cash was utilized for the reduction of FHLB advances and deposits.
Off-Balance Sheet Commitments and Contractual Obligations
In the normal course of business, the Bank routinely enters into various off-balance sheet commitments, primarily relating to the origination and funding of loans. At March 31, 2024, outstanding commitments to originate loans totaled $136.5 million and outstanding undrawn lines of credit totaled $1.40 billion, of which $1.07 billion were commitments to commercial and commercial construction borrowers and $330.4 million were commitments to consumer and residential construction borrowers. Commitments to fund undrawn lines of credit and commitments to originate loans are agreements to lend to a customer as long as there is no violation of any condition established in the existing contracts. Commitments generally have fixed expiration
9

dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company’s exposure to credit risk is represented by the contractual amount of the instruments.
At March 31, 2024, the Company also had various contractual obligations, which included debt obligations of $1.15 billion, including finance lease obligations of $1.6 million, and an additional $19.1 million in operating lease obligations included in other liabilities. The Company expects to have sufficient funds available to meet current commitments in the normal course of business. Time deposits scheduled to mature in one year or less totaled $2.24 billion at March 31, 2024.
Liquidity Used in Stock Repurchases and Cash Dividends
Under the Company’s stock repurchase program, shares of OceanFirst Financial Corp. common stock may be purchased in the open market and through other privately-negotiated transactions, from time-to-time, depending on market conditions. The repurchased shares are held as treasury stock for general corporate purposes. For the quarter ended March 31, 2024, the Company resumed repurchase activity, repurchasing 957,827 shares of its common stock totaling $15.1 million. At March 31, 2024, there were 1,976,611 shares available to be repurchased under the authorized stock repurchase program.
Cash dividends on common stock declared and paid during the first three months of March 31, 2024 were $11.9 million. Cash dividends on preferred stock declared and paid during the first three months of March 31, 2024 were $1.0 million.
The Company’s ability to continue to repurchase shares of common stock and pay dividends remain dependent upon capital distributions from the Bank, which may be adversely affected by capital restraints imposed by applicable regulations. If applicable regulations or regulatory bodies prevent the Bank from paying a dividend to the Company, the Company may not have the liquidity necessary to repurchase shares of common stock or pay a dividend in the future or pay a dividend at the same rate as historically paid or be able to meet current debt obligations. Additionally, regulations of the Federal Reserve may prevent the Company from either paying or increasing the cash dividend to common stockholders. These regulatory policies may affect the ability of the Parent Company to pay dividends, repurchase shares of common stock, or otherwise engage in capital distributions.
Capital Management
The Company manages its capital sources, uses, and expected future needs through its Treasury function and the Asset Liability Committee. The Company has an internal policy that addresses capital and management monitors the adherence to policy limits to satisfy current and future capital needs. The policy includes internal limits, monitoring of key indicators, sources and availability, intercompany transactions, forecasts and stress testing, and other qualitative and quantitative metrics.
Additionally, management performs multiple capital stress test scenarios periodically, varying loan growth, earnings, access to the capital markets, credit losses, and mark-to-market losses in the investment portfolio, including both available-for-sale and held-to-maturity. As of March 31, 2024, the Bank and Parent Company continued to maintain adequate capital under all stress scenarios, including a scenario where all losses related to the investment securities portfolio are realized. The Bank and the Parent Company also have detailed contingency capital plans and obtain comprehensive reporting of capital trends on a regular basis, which are reviewed by management and the Board.
10

Regulatory Capital Requirements
As of March 31, 2024 and December 31, 2023, the Company and the Bank satisfied all regulatory capital requirements currently applicable as follows (dollars in thousands):
ActualFor capital adequacy
purposes
To be well-capitalized
under prompt
corrective action
As of March 31, 2024AmountRatioAmountRatioAmountRatio
Company:
Tier 1 capital (to average assets)$1,223,658 9.38 %$521,831 4.00 %N/AN/A
Common equity Tier 1 (to risk-weighted assets)
1,093,935 11.01 695,214 7.00 
(1)
N/AN/A
Tier 1 capital (to risk-weighted assets)1,223,658 12.32 844,189 8.50 
(1)
N/AN/A
Total capital (to risk-weighted assets)1,419,157 14.29 1,042,821 10.50 
(1)
N/AN/A
Bank:
Tier 1 capital (to average assets)$1,148,120 8.87 %$517,815 4.00 %$647,269 5.00 %
Common equity Tier 1 (to risk-weighted assets)
1,148,120 11.68 687,868 7.00 
(1)
638,734 6.50 
Tier 1 capital (to risk-weighted assets)1,148,120 11.68 835,268 8.50 
(1)
786,134 8.00 
Total capital (to risk-weighted assets)1,218,619 12.40 1,031,802 10.50 
(1)
982,668 10.00 
As of December 31, 2023
Company:
Tier 1 capital (to average assets)$1,218,142 9.31 %$523,588 4.00 %N/AN/A
Common equity Tier 1 (to risk-weighted assets)
1,088,542 10.86 701,778 7.00 
(1)
N/AN/A
Tier 1 capital (to risk-weighted assets)1,218,142 12.15 852,159 8.50 
(1)
N/AN/A
Total capital (to risk-weighted assets)1,413,400 14.10 1,052,667 10.50 
(1)
N/AN/A
Bank:
Tier 1 capital (to average assets)$1,155,896 8.90 %$519,690 4.00 %$649,612 5.00 %
Common equity Tier 1 (to risk-weighted assets)
1,155,896 11.65 694,620 7.00 
(1)
645,004 6.50 
Tier 1 capital (to risk-weighted assets)1,155,896 11.65 843,467 8.50 
(1)
793,852 8.00 
Total capital (to risk-weighted assets)1,226,154 12.36 1,041,930 10.50 
(1)
992,315 10.00 
(1)Includes the Capital Conservation Buffer of 2.50%.
The Company and the Bank satisfied the criteria to be “well-capitalized” under the Prompt Corrective Action regulations.
At March 31, 2024 and December 31, 2023, the Company maintained a stockholders’ equity to total assets ratio of 12.41% and 12.28%, respectively.
11

Lending Activities
Loan Portfolio Composition. At March 31, 2024, the Company had total loans outstanding of $10.13 billion, of which $6.24 billion, or 61.6% of total loans, were commercial real estate, multi-family, and land loans (collectively, “commercial real estate”). The remainder of the portfolio consisted of $677.2 million of commercial and industrial loans, or 6.7% of total loans; $2.97 billion of residential real estate loans, or 29.3% of total loans; and $245.9 million of consumer loans, primarily home equity loans and lines of credit, or 2.4% of total loans.
Commercial real estate. The Bank originates commercial real estate loans that are secured by properties, or properties under construction, that are generally used for business purposes such as office, industrial, multi-family or retail facilities. Commercial real estate loans are provided on owner-occupied properties and on investor-owned properties. At March 31, 2024, of the total commercial real estate portfolio, $5.32 billion or 85.3% was considered investor-owned and $914.6 million or 14.7% was considered owner-occupied.
The Bank performs extensive due diligence in underwriting commercial real estate loans due to the larger loan amounts and the riskier nature of such loans. The Bank assesses and mitigates the risk in several ways, including inspection of all such properties and the review of the overall financial condition of the borrower and guarantors, which include, for example, the review of the rent rolls and applicable leases/lease terms and conditions and the verification of income. A tenant analysis and market analysis are part of the underwriting.
For investor-owned properties, because repayment is often dependent on the successful management of the properties, repayment of commercial real estate loans may be affected by adverse conditions in the real estate market or the economy. As a result, the Bank is particularly vigilant of this portfolio. The Bank believes this portfolio is highly diversified with loans secured by a variety of property types in multiple geographies and the portfolio exhibits stable credit quality.
The following tables present additional information on the Company’s commercial real estate - investor owned loans. The Company’s commercial real estate - investor owned loans by industry as of March 31, 2024:
As of March 31, 2024
(dollars in thousands)AmountPercent of Total
Weighted Average LTV (1)
Weighted Average Debt Service Coverage Ratio (2)
Office$531,666 11 %52 %1.7x
Medical311,497 57 1.7
Credit Tenant262,224 64 1.5
Total Office (3)
1,105,387 24 56 1.7
Retail1,081,900 23 57 1.9
Multi-family (4)
883,877 19 58 1.6
Industrial/warehouse721,762 15 52 2.0
Hospitality153,524 48 1.9
Other (5)
739,773 16 46 1.8
Total $4,686,223 100 %54 1.8
Construction636,532 
Total CRE Investor owned and construction$5,322,755 
(1) Represents the weighted average of loan balances as of March 31, 2024 divided by their most recent appraisal value, which is generally obtained at the time of origination.
(2) Represents the weighted average of net operating income on the property before debt service divided by the loan’s respective annual debt service based on the most recent credit review of the borrower.
(3) Central business district (“CBD”) exposure represents $123 million, or 11.1%, of the total office loan balance. Office CBD loans had a weighted average LTV of 66% and weighted average debt service coverage ratio of 1.6x. $82 million, or 67%, of the total office CBD exposure are to credit tenants, life sciences and medical borrowers. New York City office CBD loans represent $16 million, or 0.12% of the Company’s total assets.
(4) New York City rent-regulated multi-family loans, where the property has more than 50% of its units rent-regulated, represent $36 million, or 0.27% of the Company’s total assets.
(5) Other includes co-operatives, single purpose, stores and some living units / mixed use, investor owned 1-4 family, land / development, and other.
12

The following table presents total commercial real estate - investor owned loans by geography (generally based on location of collateral) as of March 31, 2024:
As of March 31, 2024
(dollars in thousands)AmountPercent of Total
New York$1,546,423 33 %
Pennsylvania and Delaware1,254,500 27 
New Jersey1,177,786 25 
Maryland and District of Columbia149,624 
Massachusetts149,020 
Other408,870 
Total $4,686,223 100 %
Construction636,532 
Total CRE investor owned and construction$5,322,755 
Asset quality. The following table sets forth information regarding the Company’s non-performing assets, consisting of non-performing loans. It is the policy of the Company to cease accruing interest on loans 90 days or more past due or in the process of foreclosure.
March 31,December 31,
20242023
 (dollars in thousands)
Non-performing loans (1):
Commercial real estate – investor$21,507 $20,820 
Commercial real estate – owner occupied3,355 351 
Commercial and industrial567 304 
Residential real estate7,181 5,542 
Other consumer2,401 2,531 
Total non-performing loans and assets $35,011 $29,548 
PCD loans, net of allowance for loan credit losses
$16,700 $16,122 
Delinquent loans 30-89 days$17,534 $19,202 
Allowance for loan credit losses as a percent of total loans (2)
0.66 %0.66 %
Allowance for loan credit losses as a percent of total non-performing loans (2)
191.86 227.21 
Non-performing loans as a percent of total loans receivable0.35 0.29 
Non-performing assets as a percent of total assets0.26 0.22 
(1)As of March 31, 2024 and December 31, 2023, non-performing loans included the remaining exposure of $8.8 million on a single commercial real estate relationship that was partially charged-off during 2023
(2)Loans acquired from prior bank acquisitions were recorded at fair value. The net unamortized credit and PCD marks on these loans, not reflected in the allowance for loan credit losses, were $7.0 million and $7.5 million at March 31, 2024 and December 31, 2023, respectively.
Overall asset quality metrics remained strong for the quarter. The Company’s non-performing loans represented 0.35% and 0.29% of total loans, respectively. The allowance for loan credit losses as a percentage of total non-performing loans was 191.86%, as compared to 227.21%. The level of 30 to 89 days delinquent loans decreased to $17.5 million, from $19.2 million. The Company’s allowance for loan credit losses was 0.66% of total loans for each period.
13


The Company classifies loans and other assets in accordance with regulatory guidelines. The table below excludes any loans held-for-sale and represents Special Mention and Substandard assets (in thousands):
March 31,December 31,
20242023
Special Mention$69,283 $40,385 
Substandard98,241 106,552 
The increase in special mention loans was primarily due to new downgrades of three commercial relationships totaling $33.5 million, partly offset by three commercial loans totaling $3.5 million which were upgraded during the quarter. Additionally, the decrease in substandard loans was primarily due to two CRE-Investor Owned relationships totaling $7.6 million that migrated from substandard to pass.
14

Critical Accounting Policies and Estimates

Note 1 to the Company’s Audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”), as supplemented by this report, contains a summary of significant accounting policies. Various elements of these accounting policies, by their nature, are subject to estimation techniques, valuation assumptions and other subjective assessments. Certain assets are carried on the consolidated statements of financial condition at estimated fair value or the lower of cost or estimated fair value. Policies with respect to the methodology used to determine the allowance for credit losses is a critical accounting policy and estimate because of its importance to the presentation of the Company’s financial condition and results of operations and high level of subjectivity. The critical accounting policy involves a higher degree of complexity and requires management to make difficult and subjective judgments which often require assumptions or estimates about highly uncertain matters. The use of different judgments, assumptions, and estimates could result in material differences in the results of operations or financial condition. The critical accounting policy and its application is reviewed periodically, and at least annually, with the Audit Committee of the Board of Directors.
Goodwill in accordance with ASC 350, Intangibles – Goodwill and Other was a critical accounting estimate in the preparation of the consolidated financial statements.

Impact of New Accounting Pronouncements

Accounting Pronouncements Adopted in 2024
In June 2022, the financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-03, “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The amendments in this ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. In addition, this update introduces new disclosure requirements to provide information about the contractual sales restriction including the nature and remaining duration of the restriction. This update is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2023. Early adoption is permitted. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.
In March 2023, FASB issued ASU 2023-02, “Investments - Equity Method and Joint Venture (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method”. The amendments in this ASU permit reporting entities to account for the tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method. This update is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2023. Early adoption is permitted. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted
In August 2023, FASB issued ASU 2023-05, “Business Combinations - Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement”. The amendments in this ASU require that a joint venture, upon formation, apply a new basis of accounting and initially measure assets and liabilities at fair value, with exceptions to fair value measurement that are consistent with the business combinations guidance. This update will be effective prospectively for all joint venture formations with a formation date on or after January 1, 2025. Early adoption is permitted. The Company does not expect this standard to have a material impact to the consolidated financial statements.
In November 2023, FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”. The amendments in this ASU require improved reportable segment information on an annual and interim basis, primarily through enhanced disclosures about significant segment expenses. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2023, and interim periods for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company does not expect this standard to have an impact on the consolidated financial statements.
In December 2023, FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The amendments in this ASU require improved annual income tax disclosures surrounding rate reconciliation, income taxes paid, and other disclosures. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this standard on the consolidated financial statements.
15

Private Securities Litigation Reform Act Safe Harbor Statement
In addition to historical information, this quarterly report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on certain assumptions and describe future plans, strategies and expectations of OceanFirst Financial Corp. (the “Company”). These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “will,” “should,” “may,” “view,” “opportunity,” “potential,” or similar expressions or expressions of confidence. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to, those items discussed under Item 1A. Risk Factors herein and the following: changes in interest rates, inflation, general economic conditions, potential recessionary conditions, levels of unemployment in the Company’s lending area, real estate market values in the Company’s lending area, potential goodwill impairment, natural disasters, potential increases to flood insurance premiums, the current or anticipated impact of military conflict, terrorism or other geopolitical events, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, the availability of low-cost funding, changes in liquidity, including the size and composition of the Company’s deposit portfolio, including the percentage of uninsured deposits in the portfolio, changes in capital management and balance sheet strategies and the ability to successfully implement such strategies, competition, demand for financial services in the Company’s market area, changes in consumer spending, borrowing and saving habits, changes in accounting principles, a failure in or breach of the Company’s operational or security systems or infrastructure, including cyberattacks, the failure to maintain current technologies, failure to retain or attract employees, the effect of the Company’s rating under the Community Reinvestment Act, the impact of pandemics on our operations and financial results and those of our customers and the Bank’s ability to successfully integrate acquired operations.
These risks and uncertainties are further discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, under Item 1A - Risk Factors and elsewhere, and subsequent securities filings and should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
16

Item 3.    Quantitative and Qualitative Disclosures About Market Risk
Management of Interest Rate Risk (“IRR”)
Market risk is the risk of loss from adverse changes in market prices and rates. The Company’s market risk arises primarily from the IRR inherent in its lending, investment, deposit-taking, and funding activities. The Company’s profitability is affected by fluctuations in interest rates. Changes in interest rates may negatively or positively impact the Company’s earnings to the extent that the interest rates borne by assets and liabilities do not change at the same speed, to the same extent or on the same basis. Changes in interest rates may also negatively or positively impact the market value of the Company’s investment securities, in particular fixed-rate instruments. Net gains or losses in available-for-sale securities can increase or decrease accumulated other comprehensive income or loss and total stockholders’ equity. Management actively monitors and manages IRR. The extent of the movement of interest rates, higher or lower, is an uncertainty that could have a substantial impact on the earnings and stockholders’ equity of the Company.
The principal objectives of the IRR management function are to: evaluate the IRR inherent in the Company’s business; determine the level of risk appropriate given the Company’s business focus, operating and interest rate environment, capital and liquidity requirements, and performance objectives; and manage the risk consistent with Board approved guidelines. The Company’s Board maintains an Asset Liability Committee (“ALCO”) consisting of members of management, responsible for reviewing asset liability policies and the IRR position. ALCO meets regularly and reports the Company’s IRR position and trends to the Board on a regular basis.
The Company utilizes a number of strategies to manage IRR including, but not limited to: (1) managing the origination, purchase, sale, and retention of various types of loans with differing IRR profiles; (2) attempting to reduce the overall interest rate sensitivity of liabilities by emphasizing stable relationship-based deposits and longer-term deposits; (3) selectively purchasing interest rate swaps and caps converting the rates for customer loans to manage individual loans and the Bank’s overall IRR profile; (4) managing the investment portfolio IRR profile; (5) managing the maturities and rate structures of borrowings and time deposits; and (6) purchasing interest rate swaps to manage overall balance sheet interest rate risk.
The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest rate sensitive.” Interest rate sensitivity is monitored through the use of an IRR model, which measures the change in the institution’s economic value of equity (“EVE”) and net interest income under various interest rate scenarios. EVE is the difference between the net present value of assets, liabilities and off-balance-sheet contracts. Interest rate sensitivity is monitored by management through the use of a model which measures IRR by modeling the change in EVE and net interest income over a range of interest rate scenarios. Modeled assets and liabilities are assumed to reprice at respective repricing or maturity dates. Pricing caps and floors are included in the results, where applicable. The Company uses prepayment expectations set forth by market sources as well as Company generated data where applicable. Generally, cash flows from loans and securities are assumed to be reinvested to maintain a static balance sheet. Other assumptions about balance sheet mix are generally held constant. The Company’s interest rate sensitivity should be reviewed in conjunction with the financial statements and notes thereto contained in the 2023 Form 10-K.
The methodologies and assumptions used in this analysis are periodically evaluated and refined in response to changes in the market environment, changes in the Company’s balance sheet composition, enhancements in the Company’s modeling and other factors. Such changes may affect historical comparisons of these results.

17

The Company performs a variety of EVE and twelve-month net interest income sensitivity scenarios. The following table sets forth sensitivity for a specific range of interest rate scenarios as of March 31, 2024 and December 31, 2023.
 March 31, 2024December 31, 2023
Change in Interest Rates in Basis Points Economic Value of EquityNet Interest IncomeEconomic Value of EquityNet Interest Income
(Rate Shock)% Change% Change% Change% Change
300(4.9)%3.0 %(12.8)%(2.2)%
200(3.0)2.3 (9.1)(1.3)
100(1.4)1.5 (5.2)(0.4)
Static— — — — 
(100)1.8 (1.6)7.0 (0.5)
(200)2.7 (3.7)8.8 (1.9)
(300)0.3 (6.6)6.8 (4.2)
The net interest income sensitivity results indicate that at March 31, 2024 the Company was modestly asset sensitive. The change in sensitivity between March 31, 2024 and December 31, 2023 was impacted by a deposit mix shift within non-maturity deposits with lower betas as well as a change in loan prepayments, partially offset by an increase in overnight borrowings and reduction in short-term time deposits.

Overall, the measure of EVE at risk decreased in all rate scenarios from December 31, 2023 to March 31, 2024. This decrease was the result of a deposit mix shift within non-maturity deposits with lower betas and longer average lives, as well as a change in loan prepayments.
Certain shortcomings are inherent in the methodology used in the EVE and net interest income IRR measurements. The model requires the making of certain assumptions which may tend to oversimplify the manner in which actual yields and costs respond to changes in market interest rates. First, the model assumes that the composition of the Company’s interest sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured. Second, the model assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or repricing of specific assets and liabilities. Third, the model does not take into account the Company’s business or strategic plans or any steps it may take to respond to changes in rates. Fourth, prepayment, rate sensitivity, and average life assumptions can have a significant impact on the IRR model results. Lastly, the model utilizes data derived from historical performance. Accordingly, although the above measurements provide an indication of the Company’s IRR exposure at a particular point in time, such measurements are not intended to provide a precise forecast of the effect of changes in market interest rates. Given the unique nature of the post-pandemic interest rate environment and the speed with which interest rates have been changing, the projections noted above on the Company’s EVE and net interest income can be expected to significantly differ from actual results.

Item 4.    Controls and Procedures
(a) Disclosure Controls and Procedures
The Company’s management, including the Company’s principal executive officer and principal financial officer, have evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”). Based upon their evaluation, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective. Disclosure controls and procedures are the controls and other procedures that are designed to ensure that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the Securities and Exchange Commission (the “SEC”) (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the quarter ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

18

OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands, except per share amounts)
March 31,December 31,
20242023
 (Unaudited) 
Assets
Cash and due from banks$130,422 $153,718 
Debt securities available-for-sale, at estimated fair value744,944 753,892 
Debt securities held-to-maturity, net of allowance for securities credit losses of $1,058 at March 31, 2024 and $1,133 at December 31, 2023 (estimated fair value of $1,029,965 at March 31, 2024 and $1,068,438 at December 31, 2023)
1,128,666 1,159,735 
Equity investments103,201 100,163 
Restricted equity investments, at cost85,689 93,766 
Loans receivable, net of allowance for loan credit losses of $67,173 at March 31, 2024 and $67,137 at December 31, 2023
10,068,209 10,136,721 
Loans held-for-sale4,702 5,166 
Interest and dividends receivable52,502 51,874 
Premises and equipment, net119,211 121,372 
Bank owned life insurance266,615 266,498 
Assets held for sale28 28 
Goodwill506,146 506,146 
Core deposit intangible8,669 9,513 
Other assets199,974 179,661 
Total assets$13,418,978 $13,538,253 
Liabilities and Stockholders’ Equity
Deposits$10,236,851 $10,434,949 
Federal Home Loan Bank (“FHLB”) advances658,436 848,636 
Securities sold under agreements to repurchase with customers66,798 73,148 
Other borrowings425,722 196,456 
Advances by borrowers for taxes and insurance28,187 22,407 
Other liabilities337,147 300,712 
Total liabilities11,753,141 11,876,308 
Stockholders’ equity:
Preferred stock, $0.01 par value, $1,000 liquidation preference, 5,000,000 shares authorized, and 57,370 shares issued at both March 31, 2024 and December 31, 2023
1 1 
Common stock, $0.01 par value, 150,000,000 shares authorized, 62,505,408 and 62,182,767 shares issued at March 31, 2024 and December 31, 2023, respectively; and 58,812,498 and 59,447,684 shares outstanding at March 31, 2024 and December 31, 2023, respectively
613 613 
Additional paid-in capital1,163,282 1,161,755 
Retained earnings608,355 592,542 
Accumulated other comprehensive loss(19,415)(20,862)
Less: Unallocated common stock held by Employee Stock Ownership Plan ("ESOP")(3,470)(3,780)
Treasury stock, 3,692,910 and 2,735,083 shares at March 31, 2024 and December 31, 2023, respectively
(84,254)(69,106)
OceanFirst Financial Corp. stockholders’ equity1,665,112 1,661,163 
Non-controlling interest725 782 
Total stockholders’ equity1,665,837 1,661,945 
Total liabilities and stockholders’ equity$13,418,978 $13,538,253 

See accompanying Notes to Unaudited Consolidated Financial Statements.
19

OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
 For the Three Months Ended March 31,
 20242023
 (Unaudited)
Interest income:
Loans$137,121 $121,720 
Debt securities19,861 14,286 
Equity investments and other4,620 3,028 
Total interest income161,602 139,034 
Interest expense:
Deposits59,855 21,330 
Borrowed funds15,523 18,902 
Total interest expense75,378 40,232 
Net interest income86,224 98,802 
Provision for credit losses591 3,013 
Net interest income after provision for credit losses85,633 95,789 
Other income:
Bankcard services revenue1,416 1,330 
Trust and asset management revenue526 612 
Fees and service charges4,473 5,159 
Net gain on sales of loans357 20 
Net gain (loss) on equity investments1,923 (6,801)
Income from bank owned life insurance1,862 1,281 
Commercial loan swap income138 701 
Other1,591 (229)
Total other income12,286 2,073 
Operating expenses:
Compensation and employee benefits32,759 33,920 
Occupancy5,199 5,239 
Equipment1,130 1,205 
Marketing990 982 
Federal deposit insurance and regulatory assessments3,135 1,749 
Data processing5,956 6,154 
Check card processing1,050 1,281 
Professional fees2,732 5,098 
Amortization of core deposit intangible844 1,027 
Branch consolidation expense, net 70 
Merger related expenses 22 
Other operating expense4,877 4,562 
Total operating expenses58,672 61,309 
Income before provision for income taxes39,247 36,553 
Provision for income taxes10,637 8,654 
Net income28,610 27,899 
Net (loss) income attributable to non-controlling interest(57)16 
Net income attributable to OceanFirst Financial Corp.28,667 27,883 
Dividends on preferred shares1,004 1,004 
Net income available to common stockholders$27,663 $26,879 
Basic earnings per share$0.47 $0.46 
Diluted earnings per share$0.47 $0.46 
Average basic shares outstanding58,789 58,774 
Average diluted shares outstanding58,791 58,918 
See accompanying Notes to Unaudited Consolidated Financial Statements.
20

OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
 
 For the Three Months Ended March 31,
 20242023
 (Unaudited)
Net income$28,610 $27,899 
Other comprehensive income:
Net unrealized gain on debt securities (net of tax expense of $634 in 2024 and $1,766 in 2023)
1,993 5,547 
Accretion of unrealized loss on debt securities reclassified to held-to-maturity (net of tax expense of $42 in 2024 and $56 in 2023)
61 79 
Unrealized (loss) gain on derivative hedges (net of tax benefit of $302 in 2024 and tax expense of $131 in 2023)
(949)412 
Reclassification adjustment for losses included in net income (net of tax expense of $109 in 2024 and $201 in 2023)
342 629 
Total other comprehensive income, net of tax1,447 6,667 
Total comprehensive income30,057 34,566 
Less: comprehensive (loss) income attributable to non-controlling interest(57)16 
Comprehensive income attributable to OceanFirst Financial Corp.30,114 34,550 
Less: Dividends on preferred shares1,004 1,004 
Total comprehensive income available to common stockholders$29,110 $33,546 
See accompanying Notes to Unaudited Consolidated Financial Statements.
21


OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(dollars in thousands, except per share amounts)
(Unaudited)
For the Three Months Ended March 31, 2024 and 2023
Preferred
Stock
Common
Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
(Loss) Income
Employee
Stock
Ownership
Plan
Treasury
Stock
Non-Controlling InterestTotal
Balance at December 31, 2022$1 $612 $1,154,821 $540,507 $(35,982)$(6,191)$(69,106)$802 $1,585,464 
Net income— — — 27,883 — — — 16 27,899 
Other comprehensive income, net of tax— — — — 6,667 — — — 6,667 
Stock compensation— — 1,828 — — — — — 1,828 
Allocation of ESOP stock— — 61 — — 603 — — 664 
Cash dividend $0.20 per share
— — — (11,755)— — — — (11,755)
Exercise of stock options— 1 1,297 (690)— — — — 608 
Preferred stock dividend— — — (1,004)— — — — (1,004)
Balance at March 31, 2023$1 $613 $1,158,007 $554,941 $(29,315)$(5,588)$(69,106)$818 $1,610,371 
Balance at December 31, 2023$1 $613 $1,161,755 $592,542 $(20,862)$(3,780)$(69,106)$782 $1,661,945 
Net income— — — 28,667 — — — (57)28,610 
Other comprehensive income, net of tax— — — — 1,447 — — — 1,447 
Stock compensation— — 1,541 — — — — — 1,541 
Allocation of ESOP stock— — (43)— — 310 — — 267 
Cash dividend $0.20 per share
— — — (11,850)— — — — (11,850)
Repurchase of 957,827 shares of common stock
— — 29 — — — (15,148)— (15,119)
Preferred stock dividend— — — (1,004)— — — — (1,004)
Balance at March 31, 2024$1 $613 $1,163,282 $608,355 $(19,415)$(3,470)$(84,254)$725 $1,665,837 
See accompanying Notes to Unaudited Consolidated Financial Statements.
22

OceanFirst Financial Corp.
CONSOLIDATED STATEMENT OF CASH FLOWS
(dollars in thousands)
 For the Three Months Ended March 31,
 20242023
 (Unaudited)
Cash flows from operating activities:
Net income$28,610 $27,899 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of premises and equipment2,869 3,094 
Allocation of ESOP stock267 664 
Stock compensation1,541 1,828 
Net excess tax expense on stock compensation365 250 
Amortization of servicing asset19 15 
Net premium amortization in excess of discount accretion on securities14 1,093 
Net amortization of deferred costs on borrowings152 147 
Amortization of core deposit intangible844 1,027 
Net accretion of purchase accounting adjustments(947)(1,267)
Net amortization of deferred fees/costs and premiums/discounts on loans(588)(138)
Provision for credit losses591 3,013 
Net gain on sale of fixed assets (6)
Net loss on sales of available-for-sale securities110 697 
Net (gain) loss on equity investments(1,923)6,801 
Net gain on sales of loans(357)(20)
Proceeds from sales of residential loans held for sale30,322 3,881 
Residential loans originated for sale(29,501)(5,056)
Increase in value of bank owned life insurance(1,862)(1,281)
Increase in interest and dividends receivable(628)(2,638)
Deferred tax provision (benefit)1,422 (16)
(Increase) decrease in other assets(20,997)23,221 
Increase (decrease) in other liabilities35,789 (38,834)
Total adjustments17,502 (3,525)
Net cash provided by operating activities46,112 24,374 
Cash flows from investing activities:
Net decrease (increase) in loans receivable69,501 (120,505)
Purchase of debt securities available-for-sale(6,628)(4,287)
Purchase of debt securities held-to-maturity(1,994)(55,444)
Purchase of equity investments(1,282)(6,736)
Proceeds from maturities and calls of debt securities available-for-sale5,610 15,500 
Proceeds from maturities and calls of debt securities held-to-maturity9,002 6,980 
Proceeds from sales of debt securities available-for-sale390 1,300 
Proceeds from sale of equity investments 661 
Principal repayments on debt securities available-for-sale12,491  
Principal repayments on debt securities held-to-maturity24,371 24,273 
Proceeds from bank owned life insurance1,745 230 
Proceeds from the redemption of restricted equity investments20,850 58,129 
Purchases of restricted equity investments(12,773)(64,596)
Purchases of premises and equipment(680)(2,153)
Net cash provided by (used in) investing activities120,603 (146,648)
23

OceanFirst Financial Corp.
CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
(dollars in thousands)
 For the Three Months Ended March 31,
 20242023
 (Unaudited)
Cash flows from financing activities:
(Decrease) increase in deposits$(198,053)$317,973 
(Decrease) increase in short-term borrowings(6,373)1,814 
Net (repayment) proceeds from FHLB advances(190,200)135,400 
Net proceeds from other borrowings229,000  
Increase in advances by borrowers for taxes and insurance5,780 9,793 
Exercise of stock options 608 
Payment of employee taxes withheld from stock awards and phantom stock units(2,192)(2,308)
Purchase of treasury stock(15,119) 
Dividends paid(12,854)(12,759)
Net cash (used in) provided by financing activities(190,011)450,521 
Net (decrease) increase in cash and due from banks and restricted cash(23,296)328,247 
Cash and due from banks and restricted cash at beginning of period153,718 167,986 
Cash and due from banks and restricted cash at end of period$130,422 $496,233 
Supplemental Disclosure of Cash Flow Information:
Cash and due from banks at beginning of period$153,718 $167,946 
Restricted cash at beginning of period 40